Fact sheets on each Portfolio

FACT SHEET: MARKET-LINKED PORTFOLIO

Investment objective

The investment objective of the Market-linked Portfolio is to achieve a real return (after deducting retirement fund tax and management expenses) relative to SA price inflation of 5% p.a. over any 7-year period. Please note that this level of return is not guaranteed.

This portfolio is available both in the Life Stage Portfolios and the Own Choice Portfolios.

Asset allocation

The strategic asset allocation of the Portfolio is shown in the chart below:

The strategic allocation for the global balanced component is 70% global equities, 15% global property, 15% global bonds. Thus the Market-linked Portfolio has a 68.5% strategic allocation to equities and 31.5% strategic allocation to property, bonds and cash.

The actual allocation of the Portfolio will vary around this strategic asset allocation. It is important to highlight that the split between SA and international investments will depend on market conditions. 

Performance characteristics

This portfolio does not provide any performance guarantees. It aims to deliver a good return relative to inflation. It has a long-term investment horizon and one should not measure its performance over periods of less than 7 years.

Part of the SA and international equity component is managed according to the value style.

A key feature of the value style is that it tends to under-perform the market significantly in periods of a speculative bull market. 

The performance of this portfolio may thus at times be significantly different from that of the average retirement fund – it should generally deliver somewhat better performance in weak markets, but under-performance in strong markets. There are however no guarantees of this.

Investment managers

The investments are split between a variety of Asset Managers. They are:

  • Allan Gray, Coronation, ABAX (SA Equity Managers)
  • Investec, Coronation (SA Bond Managers)
  • A global balanced portfolio comprising a range global equity, bond and property managers which are highly rated by the Fund’s investment consultants, Willis Towers Watson (administered by Sygnia Life)

Costs

The following charges apply to this portfolio:

  • Investment management fees: The member pays the investment manager fees (the fees are deducted from the investment return credited to them). 
  • Investment administration fee: The member pays Sygnia Asset Management a fee for the provision of investment administration services (which includes daily unit prices and regulatory compliance monitoring).

FACT SHEET: STABLE PORTFOLIPO 

Investment objective

The overall investment objective of the Stable Portfolio is to earn a real return (after deducting management expenses) relative to price inflation of 3% p.a. over any rolling 3-year period, with a focus on short-term protection of capital. 

However, this level of return and protection of capital is not guaranteed. 

This portfolio is available in both the Life Stage Portfolio and the own choice portfolio.

Asset Allocation 

The portfolio is invested in equities (up to a maximum of 75%), bonds and cash, locally as well as globally. The allocation between these asset classes is highly variable and depends on the managers’ view of current market conditions at a given time. 

Performance Characteristics 

Members can expect that this portfolio should produce consistent positive returns that are targeted to beat inflation over 3 years. It is possible that in any given month the return could be negative. However the negative return is not likely to be material, and it is unlikely that there will be a negative return over any 12-month period. 

It is important to understand that whilst negative returns over a 12-month period are unlikely, they are not impossible. 

In summary, over periods of 3 to 5 years members can expect: 

  • a low probability of capital losses, and 
  • a high probability of returns above inflation.

Investment Manager 

The Stable Portfolio is invested in the Investec Cautious Managed Portfolio, Coronation Inflation Plus, and Allan Gray Global Stable Portfolio.  

Costs 

The following charges apply to this portfolio:

  • Investment management fees: The member pays a pro-rata share of the investment manager fees (the fees are deducted from the investment return credited to the member). 
  • Investment administration fee: The member pays Sygnia Asset Management a fee for the provision of investment administration services (which includes daily unit prices and regulatory compliance monitoring).

FACT SHEET: MONEY MARKET PORTFOLIO 

Investment objective

The investment objective of the Money Market Portfolio is to achieve maximum security of capital. People who have a very short investment horizon, or who expect deflationary conditions, would invest in this portfolio.  

This portfolio is available both in the Life Stage portfolios and the Own Choice portfolios.

Asset Allocation

The portfolio is invested 100% in SA money market instruments.

Performance Characteristics

This portfolio aims to protect capital, but without guarantees. However, of all the Fund’s portfolios it is the closest to providing a guarantee of capital in all economic conditions. Over the long term it is expected to achieve a real return (after deducting retirement fund tax and management expenses) relative to SA price inflation of 1% p.a. over any rolling 12-month period.

Investment managers

The investment manager for this portfolio is Investec Asset Management.

Costs

The following charges apply to this portfolio:

  • Investment management fees: The member pays the investment manager fees (the fees are deducted from the investment return credited to members).
  • Investment administration fee: The member pays Sygnia Asset Management a fee for the provision of investment administration services (which includes daily unit prices and regulatory compliance monitoring).

FACT SHEET: SHARI’AH PORTFOLIO 

Investment objective

The investment objective of the 27Four Shari’ah Multi-Managed Balanced Fund aims to deliver a real return of 4% per annum (after deducting management expenses) in excess of SA price inflation over any rolling 5-year period. This investment return is not guaranteed and will depend on market returns and investment manager skill.

This portfolio does not form part of the Life Stage Portfolios.

Asset Allocation

The 27Four Shari’ah Multi-Managed Balanced Fund has a maximum equity allocation of 60% to shares (local and offshore) with the balance of assets invested in other asset classes such as Shari’ah compliant bonds and cash, as well as commodities (such as gold and platinum Exchange Traded Funds). 

Performance Characteristics

The Fund has a lower weighting to equities and a higher weighting to fixed income assets than the PetroSA Retirement Fund’s Market-linked Portfolio. This means that the Shari’ah Portfolio should provide a somewhat greater cushion against negative returns in the equity markets in the short term than the Market Portfolio.

This portfolio is exposed to the performance of markets, and the return you earn from this option over shorter periods may be positive or negative depending on market conditions.

Investment manager

The manager is 27Four Investment Managers (an authorised financial services provider) as the multi-manager responsible for the construction of the Fund’s Shari’ah compliant investment portfolio. All investments meet Shari’ah principles as interpreted and laid down by the 27Four Shari’ah Supervisory Board. The investment process ensures adherence to Shari’ah principles which the 27Four Shari’ah Supervisory Board monitors closely on a regular basis. The specific investment product is the 27Four Shari’ah Multi-Managed Balanced Fund. 

Multi-Manager Investment process

27Four combines different asset managers for each asset class, each manager with a different set of skills. The portfolio is therefore diversified by investing in a combination of Shari’ah compliant equity fund managers locally and internationally, Sukuks (“Islamic bonds”) and direct physical exposure to gold bullion. 

Costs

The following charges apply to the Shari’ah Portfolio:

  • Investment management fees and multi-manager fees. The member pays these fees, which are deducted from the investment return credited to them. 
  • Investment administration fee: The member pays Sygnia Asset Management a fee for the provision of investment administration services (which includes daily unit prices and regulatory compliance monitoring).